Reagan Continues Mfn for Rumania for Another Year

President Reagan has notified Congress that he will extend for another year most favored national (MFN) trade status to Rumania following assurances he received from President Nicolae Ceausescu that the education tax imposed on would-be Rumanian emigrants will be dropped.

Reagan, in a message to Congress last Friday, also said he had received personal assurances from the Rumanian President that no other “economic or procedual barriers” would be created to impede the efforts of Rumanians seeking to emigrate. Congress has 60 days to overturn the decision. If it takes no action, the continuation of MFN status goes ahead.

The decision by Reagan followed months of negotiations between the United States and Rumanian officals to have Rumania drop its so called “education tax” which was first announced last November. Since November, the Administration has repeatedly warned that the tax, which requires all emigrants to reimburse the government for the free secondary and higher education they had received, would adversely affect Rumania’s MFN status.

Reagan issued a stern warning on March 4 that Rumania would lose its MFN status on June 30 if the tax was still in force. The imposition of the tax violated the terms of the 1974 Jackson-Vanik Amendment which links trade with Communist bloc nations to their emigration policies.

Reagan, in his message to Congress, said, “I have received assurances from the President of Rumania that Rumania will not require reimbursement to the state of educational costs as a precondition to emigration and that Rumania will not create economic or procedural barriers to emigration.

“Based on these assurances, and on the above described emigration performance, I believe the continuation of the waiver applicable to Rumania will substantially promote the objectives of the act,” Reagan said, referring to the Trade Act. He noted that about 20,000 Rumanians emigrated last year, of which 2,500 went to the U.S., 2,000 to Israel and the rest to West Germany.

State Department officials reportedly said that Rumania yielded on the education tax partially because it did not want to jeopardize its one billion a year trade with the United States. In 1981, the U.S. imported $560 million in Rumanian goods, and sold Rumania $503 million in products.

AGREEMENT WITH ISRAEL PROMISED

Meanwhile, in New York, Rabbi Arthur Schneier, president of the Appeal of Conscience Foundation, who returned from a visit to Bucharest last week, said he was told by Ceausescu that the education tax would not be applied to Rumanians seeking to emigrate to the U.S. According to Schneier, the Rumanian President told him that “We will also reach an agreement with Israel, an accord that will be mutually acceptable.”

Schneier also reported that West Germany Foreign Minister Hans Dietrich Genscher has also concluded an agreement with Rumania for the lifting of the education tax for ethnic Gemans. Schneier is senior rabbi of the Park East Synagogue in New York.